To a significant degree, bureaucratic agencies act as overseers and watchdogs of regulated industries. The mere fact that an industry is regulated refers to the fact that there needs to be oversight on the part of the industry due to a number of reasons not limited to health, safety and many other concerns. An example of the importance of this oversight can be seen in the following example of the Food and Drug Administration (FDA) and its relationship with the pharmaceutical industry.
For example, many years ago there were a number of over the counter (OTC) appetite suppressants were quick effective. However, there was a noticeable risk of strokes associated with a number of these products. As such, the FDA imposed a ban on the over the counter sale of the product. Conversely, there was a prescription only weight loss product known as Xenical that, upon careful study, was deemed a safe product (in small doses) and an over the counter version of the product was approved for general sale.
From this, it is clear that a bureaucracy can wield two fold power: on one end, it can protect the consumer from harm as evidenced from the banning of a product and, secondly, it can lift limitations on trade when limitations and restrictions on the consumer is not necessary. This two-fold example shows that the relationship between regulated companies and federal bureaucracies can be both adversarial and helpful. Of course, the definition of “good vs. bad” depends on which goal is being sought and who is being represented.
In other words, there will be anger on the part of those selling and purchasing a product that has been banned. (Of course, there will also be those who support the decision as well) The main concern that should be focused upon in this matter is that the issue is not really a ‘good vs. bad’ issue, but rather a cause and effect relationship. The free market brings a number of tremendous opportunities for both businesses and consumers alike. However, if there is a complete lack of regulation in the marketplace, there would be no consumer protection or oversight of a number of industries.
Since the main emphasis of any industry is to maximize profits, it would be doubtful that any self-regulation would be implemented. This is evidenced in the 1970’s when pollution was at all time high due to lack of regulatory control on a significant number of industries. Now, if the free market was completely unrestricted and products that were harmful to the health and safety of the public caused a negligible effect on the consumer, then the ability of the manufacturer to make a decent profit would be greatly limited. In other words, if the company/industry began to get a negative image, then people would cease purchasing.
This would damage the company and might possibly have a ripple effect that could harm the economy as a whole. Therefore, when the regulatory agencies imposed safety regulations on a product, they are also protecting the infrastructure of the manufacturer/industry. The ancillary effect of this is a protected economy. In that regard, the regulatory agencies perform a valuable service to the same companies they seemingly “restrict. ” This once again shows that the negative aspects of the relationship between regulated companies and bureaucracies are somewhat overstated and misunderstood.